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2016 (8) TMI 1089 - BOMBAY HIGH COURTAddition made on account of interest paid on Bank OD and unsecured loan - ITAT deleted the addition - Held that:- We find that the impugned order records the fact that the interest free advances made by the respondent assessee to its sister concern was to the extent of ₹ 28.67 crores at a time when it had its own interest free funds available to the extent of ₹ 41.84 crores. Therefore, in view of the decision of this Court in Commissioner of Income Tax Vs. Reliance Utility and Power Ltd. [2009 (1) TMI 4 - BOMBAY HIGH COURT ] wherein it is held that if both interest free funds and interest bearing funds are available, then a presumption arises that investments / advances have been made out of interest free funds, the disallowance of interest payment of ₹ 46.84 lakhs made to the bank was deleted. This was since interest free advances are much less than the interest free funds available with the respondent assessee giving rise to the presumption as laid down in Reliance Utility Power Ltd. (supra). - No substantial question of law - Decided against revenue Disallowance u/s 14A - ITAT restricting the disallowance only to the extent of 5% of dividend income arbitrarily - Held that:- Disallowance made by the CIT(A) at 5%, the exempt dividend income is reasonable. - Decided against revenue
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